Permit issued for Point Thomson

Post date:

Fri, 10/26/2012 - 6:19am

ANCHORAGE – The U.S. Army Corps of Engineers, Alaska District, issued a permit today to ExxonMobil Corporation and PTE Pipeline LLC (ExxonMobil), to place fill material in waters and wetlands and structures in navigable waters to construct the Point Thomson Project on Alaska’s Arctic Coastal Plain adjacent to the Beaufort Sea. The Corps issued the permit under the authorities of Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act.

The Point Thomson permit authorizes construction of infrastructure to extract hydrocarbon resources by directional drilling into the Thomson Sand Reservoir. Infrastructure includes three drill pads (one including a facility for hydrocarbon processing), approximately ten miles of infield roads, a gravel mine, airstrip, barge docking facility, navigational structures, dredging, an emergency boat ramp, infield gathering pipelines, and an export pipeline to the Badami facility 23 miles to the west. The permit contains 37 special conditions to minimize adverse impacts to the environment, including payment of a mitigation fee to the Conservation Fund to compensate for unavoidable losses of aquatic resources.

In signing the record of decision to issue the permit, Col. Christopher D. Lestochi, Commander of the Alaska District, said he found the applicants’ preferred alternative, with modifications and optimizations developed through the review process, to be least environmentally damaging practicable alternative (LEDPA) as required by law. These measures included relocation of both East and West gravel fill pads away from higher functioning coastal wetlands, minimizing fill placement along the coastal shoreline to provide for polar bear access, and reduction of the gravel mine size.

“Today’s decision is consistent with the Corps of Engineers’ Regulatory mission to protect the Nation’s aquatic resources while allowing reasonable development,” said Col. Lestochi. “Our regulatory review process provides us with a path to make decisions that are fair, flexible, and balanced.”

The Corps evaluated five alternatives that included both inland and coastal infrastructure designs, and completed an Environmental Impact Statement for the project. The Corps conducted an in-depth analysis of alternatives and supplemental technical information in order to come to a decision on the permit application. The President’s Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska facilitated efficient working relationships between federal resource agencies.

With this permit, Exxon Mobil may place fill material into a total of 267.1 acres of North Slope waters and tundra wetlands. The Point Thomson project is 60 miles east of Prudhoe Bay.

Being able to begin work on the project this winter, and not to have construction slip another year, is critical to keeping the project on schedule to begin production in 2016 or 2017.

North Slope construction is typically done in the winter.

Point Thomson is a large gas and condensate liquids deposit that was discovered in the 1970s but never developed because of challenging technical conditions – the gas field is at very high pressure – and because that without a gas pipeline there is no way to market the gas.

In recent years the company developed a concept for a gas cycling project there that would produce the gas and remove liquid condensates, which are in the gas, and market them separately.

The current project is being done to ship 10,000 barrels a day of condensates to Prudhoe Bay to mix with crude oil in the Trans Alaska Pipeline System. It is considered a first phase of Point Thomson development, to test whether the gas cycling project will work as expected.

If it does work, the project can be scale up to produce more condensates. If its doesn’t, the facilities being built can be used to support conventional gas production when a gas pipeline is built or to ship gas to Prudhoe Bay to aid in additional oil recovery there.

The pipeline being built to Point Thomson is considered a strategic extension of infrastructure to the eastern North Slope, however, because it will aid in new oil development there, both onshore and offshore.